(PEOPLE AND CULTURE)
Student Number: u1234567
Unit Number: 9999
Assignment Number: 1
Word Count: 3506
Due Date: 27 Nov. 2020
Organizational change is vital for growth by eradication of bottlenecks that hinder growth. The management identifies a weak point in its structure or a point causing operational inefficiency. However, inadequate assessment of change can lead to poor implementation of solutions to solve the organization’s issues. The forces that drive change in an organization are often internal, but external forces have a significant contribution. This paper discusses the barriers to change and their impact on organizational culture. It also focuses on how organizational culture influence changes in the firm. The influence of the workforce and management’s internal and external forces are also a point of discussion in detail. Westpac Banking Corporation has been used as an organization for analysis of change management.
Westpac Banking Corporation is a provider of banking and financial services in Sydney, Australia. The firm began its operations in 1817 as the Bank of New Wales and was renamed Westpac in 1982. It offers various products such as insurance, finance, consumer banking, corporate banking, investment banking, investment management, global wealth management under the brand name “BT,” private equity, mortgages, and credit cards. As of 2019, the firm had 33,288 employees and is considered a large-sized organization. The firm serves over 14 million customers with 1,204 branches across the globe and 3,222 ATMs. The firm has acquired various subsidiaries such as BankSA, Bank of Melbourne, and St. George Bank. The key people in its leadership component include Lindsay Maxsted as the chairman, Peter King as the CEO, and Gary Thursby as the CFO.
In 2019, the bank reported A$20.65 billion in revenue and total assets of A$906.63 billion. The organization’s business strategy focuses on building deep customer relationships, maximizing shareholders’ welfare, community leadership, and ensuring the right working environment. Westpac has a hierarchical organizational structure with a strong functional matrix as it has functional group units together under the executive committee’s leadership (Triantafilakis & Jamoo, 2020, pp6).
Barriers to Change in the Organization
In an organization, change needed to be initiated is hindered by various factors. The most prominent barrier is the lack of executive support. In an organization, the executive and the board of directors have overall control. Hence, change can only be initiate and implemented only if the executive and the board of directors offer their approval. Some changes, such as increasing company branches, increasing staff, or implementing technological changes, require resources that can only be approved by the management. Hence, lack of support and sponsorship by the executive and board of directors inhibits change. The other common barrier to change is resistance within the organization. Change is tough to implement if the employees at all levels of the organization don’t see the need for change. Hence, organizations spend a lot of time ensuring all employees understand the change’s outcome. Organizations often start to train for change to ensure employees handle change in the future.
The lack of understanding of the change being implemented creates resistance (Grama & Todericiu, 2016, pp 50). In Westpac, a lot of changes have been implemented but with various challenges. The most prominent challenge was high learning curves to ease change resistance. Organizational change, such as workforce downsizing, is faced by a lot of opposition from the group of employees impacted by the change. The other barrier to change is poor communication. Change formulation often begins at the organization’s top levels, where the management formulates strategies for implementing the change. The information on the changes is communicated downstream to the second and third tier of employees. Organizations often do communicate through memos, which circulate to different departments across the firm. However, employees will usually need clarification.
Hence, top-level management should hold meetings with employees from various departments to address the questions. The administration will answer the questions and draft the opinions of the employees on the need for change. The management gains more insight through this and assesses the employees’ inception to change before making necessary implementations (Hussain et al., 2018, pp125). An organization with poor communication will often face resistance to implementing change since employees cannot recollect any change. Change saturation is also a significant barrier to organizational change. An organization with various change projects within its change portfolio in a single period will cause change saturation. Change saturation is when an organization has too many changes to implement quickly because of a lack of prioritization. Change saturation fatigues employees under groups being impacted by the change.
Hence, the employees end up being confused about which change to deploy effort in implementing. In most cases, when there is change saturation, resources within the organization can be over-exploited, and a specific change would end up not being implemented fully. For example, suppose Westpac has an issue in its strategy and human resource. It should prioritize resources on implementing human resource change before it focuses on changing strategy as the employees are among the critical change drivers. Cultural barriers also limit change within the organization as it has various sub-cultures represented by diverse groups. The diverse groups have different perspectives on change and will have varied opinions. Some of the diverse groups will state that companies should implement change in a certain way for the implementation to be acceptable. Organizations worldwide are citing the need to have a diverse workforce; however, the diverse workforce could become a significant barrier to change.
The other barrier to change is new technology. The banking industry has seen the development of new technology to improve efficiency through fast remittance of money in a secure manner. The technology change raises the need for banks such as Westpac to change the Information Technology infrastructure implemented earlier. However, employees were less familiar with the new technology, which increased the learning curve to improve the technology’s familiarization. However, technology change is highly volatile as new inventions are brought to the market regularly. Hence, keeping up with technology changes is a barrier to making operational changes within the organization. The organization will find itself spending many finances implementing the different technology changes to align with regulatory requirements.
Impact of Change on Organizational Culture
Organizational culture is represented by symbols, norms, values, beliefs and principles. Some of these elements, such as beliefs, values and principles, are shared within various groups in the organization. Symbols in an organization are represented by office layout, dress code, slogans and ceremonies (Jolita, 2018, pp30). In terms of symbols, some organizational changes impact the office layout and rituals which were prior held. For example, if Westpac initiates a downsizing of the workforce, it will need to change its office layout to conform to workforce size. Also, specific changes cause the need to have an open planned office layout with strong functionality. The environment in which teams operate defines the outcome. Hence, an open office that encourages excellent collaboration and a working atmosphere foster innovation. For example, when Westpac introduced its technology department, it ensured that the team is given office space, encouraging innovation and comprehensive programs testing.
Change in leadership can affect the dress code. Certain leaders often require an official dress code of their employees during work hours, while some leaders advise employees to be neat; however, their dressing. Also, specific leadership changes might cause a shift in the slogan used by the organization. For example, Westpac’s slogan is “It’s what Australians do.” Also, a change in leadership can lead to an increase in ceremonies within the organization. Some leaders embrace work philosophy and play, while others don’t depend on their leadership style. Norms in the organization define how people within the organization address each other, socialize, handle disputes, collaborate and even share knowledge. Structural changes within the organization often change norms within the organization. The structural changes might establish new channels of sharing knowledge within the various departments (Jolita, 2018, pp36).
Structural changes can also impact how colleagues collaborate. For example, if Westpac decides that one of its departments will work remotely, the department members will collaborate through the online platforms. According to Lewin’s change model, the refreezing phase can cause permanent change, impacting the organization’s culture. Changes in communication codes will change how employees address each other. Changes in the workforce to enhance diversity can lead to a shift in communication language to establish a universal language. A diverse workforce will also lead to introducing new values and principles that will dynamically change the culture. The diverse groups convey their beliefs and values from the cultural sets and share them with the previous workforce. Principles of teamwork and coexistence are essential to an organization.
Colleagues need to find ways to coexist with fewer disputes. The sharing of the various coexisting principles among the sub-cultures within the organization promotes a strong cultural foundation. Often, departments find it hard to promote teamwork in diverse workforces due to the different beliefs among the sub-cultures. Certain ethnic groups find it hard to interact with other ethnic groups within the subsets. Diverse workforces are pegged to changes in staffing and recruitment. HR managers focus on ensuring that the personnel is diverse to contribute to the fight for equality in society (Anderson, 2019). The changes cause a new challenge for management. The organization will need to harmonize the workforce to collaborate with ease. The values of an organization interrelate with the ethics implemented in the organization’s culture.
Employees are often required to show great integrity, respect, and honesty while attending to delegated tasks. Also, employees are needed to be more accountable for actions while performing various tasks. For example, if Westpac changes its customer confidentiality policies, employees must respect the changes and be more secretive on client information. Change in various policies and procedures impact the values of employees in the organization. Westpac insists on giving customers the best banking experience by ensuring outstanding professionalism among the employees. Great customer experience increases brand perception in the market. This has enabled Westpac to introduce brands such as BT in the market successfully. Changes within the organization to enhance customer experience will impact the values employees withhold when handling clients.
Influence of Organizational Culture on Change
Organizational culture encompasses various elements, which include purpose, ownership, community, leadership and communication. These elements influence change management in an organization in different ways. Purpose articulates the sense of ethics and empathy employees depict to solve problems that are bigger than them. The purpose of an organization is communicated through the mission statement of the company. In the case of Westpac, its mission statement is “Becoming number one in customer service.” The purpose of the organization will impact change implementation. Employees understand that all efforts undertaken are to ensure customer service. Hence, employees within Westpac work towards ensuring the achievement of excellent customer service. Therefore, change implemented with the organization to enhance customer service will be perceived with a different attitude. Employees will often look back at their purpose for great motivation in achieving full implementation of the change.
In an organization, ownership allows employees to make a recognizable effort and be responsible for the outcomes. Ownership comes with significant autonomy, which improves flexibility (Burke, 2017). In Westpac’s case, employees have substantial autonomy to allow and employees from the Sydney branch to work in a New Zealand branch. This level of independence allows for ease in implementing change. Employees in all branches or subsidiaries under Westpac’s management have the autonomy to make decisions that impact change and be accountable for the outcomes. Organizational culture is not remarkable without excellent communication. The easy inflow of information promotes excellent interactions between the management and the employees. In change management, communication is critical in many aspects. An organization culture with poor communication causes failure in change implementation since every employee is skeptical of what happens within the organization.
In an organization with poor communication, employees are often surprised that the management wants to implement changes that were never communicated. Hence, employees will often lack information about the change initiative, limiting their efforts in implementing the change. Community is an essential aspect of organizational culture. The community provides a sense of belonging among employees due to shared values, principles and goals. The feeling of belonging helps employees to come together to achieve similar objectives. In an organization that embraces community, employee values are upheld at different standards. The sense of belonging allows employees to work to implement changes collaboratively. Each idea and opinion of change is taken into context before final implementation. Hence, the employees and the management easily understand each other.
In a diverse organization, employees who share similar principles and values often group themselves. This leads to the creation of sub-cultures within the organization. In change implementation, these diverse groups are a gift and a curse. The diverse community offers a variety of ideas and opinions on change implementation. However, resistance can arise from a specific diverse group. Achieving a common ground from the different diverse groups is often difficult, which solidifies it being a curse. The community in Westpac has been the leading contributor to successful change implementation. The firm is much concerned by its employee by ensuring a great sense of belonging through team building activities, great induction programs, parties at the office, excellent training programs and honourable discharge from duty.
Leadership is a prominent aspect of organizational culture. The leadership of an organization shapes the values, principles, and norms shared among employees. The management’s leadership style is crucial in establishing standards, community and achieving the company’s mission. An excellent leadership committee in an organization impacts employees’ level of motivation and shapes ethics and morals. The current leadership bench at Westpac depicts an affiliative leadership style with the current CEO, Peter King. Peter King has worked in Westpac for over 20 years, and it is defined as a real Westpac-er (Frost, 2020, pp1). The affiliative leadership styles focus on creating channels of communication where employees can directly reach the CEO. The leadership style influences the employees’ commitment to implementing change in the organization hence achieving success in the implementation process. The current relationship between Mr King and the employees is pegged to the employees’ extraordinary efforts in implementing change. The employees are highly motivated to contribute their outstanding efforts to the change initiative.
Impact of Internal and External Forces on An Organisations’ Workforce and Management
Internal drivers of change revolve around internal change agents. The internal change agents include employees, management, customers and consultants. Therefore, the internal forces of change comprise of employee attitude, strategy, leadership, stakeholders and resource availability. Employee attitudes determine the success of implementing change. The attitude of the employees to change determines the morale towards implementing change. A bad attitude towards change guarantees poor implementation of change initiatives. The type of leadership is vital in change management. A leadership style that ensures employees’ inclusivity in change management provides an avenue for successful change implementation (Gibbons, 2019, pp126). The corporate strategy determines the level of change that the organization can sustain without losing focus on its core competencies. The stakeholders are also a driver for change in the organization.
Shareholders have voting control over various decisions that affect the organization. The shareholders will decline a change which will sabotage the organization in the future. The management must inform the shareholders deeply on the reasons for pursuing specific changes. The resource capacity of the organization also determines the successful implementation of the outlined change. Hence, the organization can only initiate change, which it has the resource capacity to implement. These internal forces impact the workforce and the management differently. The internal drivers of change increase the engagement of the workforce with the management. When change initiatives are being formulated, employees as stakeholders will raise questions on why the change is necessary and who or what will be impacted by the change. The high level of interactions between the employees and the management improves the relationship between managers and employees. This goes a long way in improving the productivity of the workforce.
The workforce and the management are also reminded of working around the corporate strategy. In most times, changes that are formulated within the workforce might cause a shift from corporate strategy. For example, Westpac decides to eradicate a profitable business unit to make room for a different business unit, which is anticipated to be more profitable. If the business unit fails to provide the required output, the firm will not have adhered to its corporate strategy of maximizing the stakeholders’ welfare. Hence, the internal drivers of change instil the need to work around the corporate strategy. The internal drivers for change impact employee behaviour. The internal drivers lead to a change in employee behaviour for robust change implementation. If employees were used to laxity, the internal forces would pressure a behaviour change to ensure that the workforce is on its toes.
The internal drivers of change encourage an agile workforce and management. The internal forces of change stress the need for a flexible workforce and agile management set up to make quick and well-planned decisions (Hayes, 2018, pp56). External drivers of change include social, economic, political, government, technological, legal and environmental. The social aspect revolves around the attitudes toward work, products and services. The economic element focuses on changing landscapes in finance and taxation; the political aspect details political agendas that affect business stability. The government’s aspect revolves around industry regulations that affect the organization. The technological part focuses on the rise of technology use progress within the industry. The demographic aspect focuses on workforce diversity. The legal aspect is focused on giving insight into industrial relation frameworks. The environmental aspect revolves around sustainability.
The financial and taxation landscape affect managerial decisions on implementing change. The management has to assess the current economic position, which is prevailing, to provide a financial feasibility report on its impact. When the economy is shrinking, the management would likely postpone changes that have a financial impact on the company. For example, when Australia experienced a financial crisis, Westpac had to slow expansion changes to ensure it saves financial resources to help in going through the financial crisis. When the economy is expanding, the organization can implement capital intensive changes due to the probability of growth in revenue reserves over time. The workforce should also keep up with political agendas in the country of operations. Political agendas have a high likelihood of resulting in propaganda, which in turn causes political instability. Political stability equals high business confidence. Hence, the workforce and management will have an understanding of the political climate if it suits making profound changes.
Westpac is in the banking industry, which is the most heavily regulated sector in the world due to financial crimes. The Australian government is responsible for regulating the banking industry. This regulation gives the management and workforce insight into how the rules can fit alongside the change without collisions with the regulators. Government regulations also educate the workforce and leadership on the rise of new policies that increase the workforce’s knowledge pool. The banking sector has seen a tremendous increase in the technological front with a surge in fintech and cryptocurrencies. The technology changes impact the workforce and management by increasing the morale for innovation and development. New technology comes with ample incentive to propagate new products that conform to the current and future customer.
Organizations within an industry have a level to which they relate too. Hence, industrial relation frameworks impact the industry’s readiness for new forms of organization. The management relies on these industrial relations to foster information sharing, increasing its level of innovation. Excellent industrial relations mean healthy competition among industrial participants too. People’s attitude towards work impacts management decisions on talent recruitment, which brings a lot of change in the organization. Also, society’s attitude towards products and services provided by the organization shapes management decisions towards which services and products to implement change (Lewis & Sahay, 2019, pp36). It also influences the route of new product and service development to be taken by the workforce. Sustainability is essential in every sector as it addresses the environmental impacts of business across the globe.
Sustainability impacts management and workforce attitude towards environmentally friendly operations. For example, the use of green energy sources to reduce the impact of non-renewable energy sources on the environment. The reduction of the use of paper to provide guidelines for products and services to clients. Implementation of sustainable programs within the organization is vital as it shows the firm’s commitment to achieving sustainable environments that foster future generations’ success.
Recommendation and Conclusion
Organizational change is crucial, although the management should assess these changes’ impact on its culture and structure. The administration should also establish frameworks that use various tools and techniques to monitor the changes implemented. Also, they should present reports on the progress to multiple stakeholders as a token of appreciating their approval and efforts contributed. In closing, companies should consider change management as a critical function in the organization. The executive bench should support the management to perform change management to the needed levels for successful change implementation. Also, organizations need to understand diversity and how to incorporate diversity in change management.
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